- GBP/USD reaches a nine-week peak at 1.2517, currently trading above the 1.2500 level, marking a gain of over 0.30% in the mid-North American session.
- Speculation suggests the BoE may have concluded its monetary policy tightening, with market odds indicating a less than 10% chance of a rate hike and a rate cut anticipated by June 2024.
- GBP/USD Technical Outlook: Could test 1.2700 if it prints a daily close above 1.2700; otherwise, expect a pullback toward 1.2400.
GBP/USD refreshes nine-week highs at 1.2517 and gains more than 0.30% in the mid-North American trading session after hitting a daily low of 1.2446. At the time of writing, the GBP/USD exchanges hands above the 1.2500 figure, keeping the bullish bias intact.
Pound Sterling gains as market participants wait for BoE’s Bailey speech
A scarce economic calendar in both sides of the Atlantic would leave GBP/USD traders adrift to the Bank of England’s (BoE) Governor Andrew Bailey's speech later, which isn’t expected to move the needle as speculations the BoE has finished tightening monetary policy. Odds for a rate hike are less than 10%, while the first-rate cut is priced in for June 2024.
On the fiscal front, the UK Primer Minister Rishi Sunak stated the government would cut taxes after witnessing a drop in inflation as he spoke ahead of the UK’s autumn budget release. The UK Chancellor of exchequer Jeremy Hunt is expected to announce how he would speed up a stagnant economy. Hunt added, “We plan a range of measures to boost business investment.”
On the US front, the Conference Board (CB) revealed the Leading Index dropped -0.8% from a -0.7%, more than expected. The report showed the economy is decelerating as deterioration in consumers and business conditions, along with a lower ISM Index for New orders, portrays a gloomy economic outlook.
Ahead of the week, the economic calendar will feature BoE Governor Andrew Bailey's speech. On Tuesday, the Chicago Fed National Activity Index, alongside Existing Home Sales, will shed some light regarding the status of the US economy.
GBP/USD Price Analysis: Technical outlook
The daily chart portrays the pair as upward biased, with GBP/USD buyers expected to test the September 11 high at 1.2548, ahead of the 1.2600 figure. Once cleared, the next stop would be the August 30 swing high at 1.2746. On the flip side, the pair would be subject to a pullback if GBP/USD fails to clear the 1.2500 mark. Hence, the pair could aim lower and test the 200-day moving average (DMA) at 1.2446 before diving to the 1.2400 mark. Once cleared, the next stop would be the November 17 low of 1.2374.
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